Auction sales fall as property market uncertainty continues

The Royal Institution of Chartered Surveyors (Rics) has reported that the success rate for residential properties sold at auction fell to its lowest level for three years in the final quarter of 2007.

During the three month period, only 57% of the residential properties auctioned achieved a sale, compared with 69% in the same period of 2006.

The figure was also down 9% of the third-quarter of 2007, with a total of 4,539 residential properties sold.

In London and the southern counties the fall was more marked, with success rates at auctions at 63% in the fourth-quarter of 2007, compared with 80% in the final quarter of 2006.

The Rics attributes the weakening demand to tighter lending conditions and greater uncertainty over the outlook for house prices.

Last year, the total number of residential properties offered at auctions rose by 15%, while the number of repossession rose by around 20%.

Property analysts are expecting the trend to continue with forecasts of a 50% rise in repossessions this year.

Rics economist, Oliver Gilmartin comments: “Fears over further house price falls have taken some stimulus out of achieved sales at the auction house as specialist lending has all but evaporated … whilst tightening credit conditions will be most acute for those with a poorer credit history, less generous loan amounts and the introduction of some upper limits on loan advances could equally hit the mid-tier of the market, increasing the number of properties languishing on auction property books.”

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